New tax law boosts penalty for being married

Women & money

Q.I have been living with my boyfriend for two years and we are contemplating marriage. We both earn good salaries: $90,000 and $80,000 as attorneys. I have often heard of the "marriage penalty" when it comes to paying taxes. Can you explain how it would apply if we were married in 1991.

A. The "marriage penalty" refers to the extra tax a couple would pay if they married and filed their tax returns jointly versus remaining single and filing as individuals.

The new tax law that went into effect last fall increases that marriage penalty.

For example, if a couple's adjusted gross income (income from salary and investments minus contributions to retirement plans and other miscellaneous items like alimony payments) exceeds $150,000, their personal exemptions start to be phased out. The personal exemption is $2150 this year. The phase out for a single begins when his AGI exceeds $100,000. So if you stay single, probably both of you will retain this tax break.

Another point: Married couples are hit with the highest federal tax level of 31 percent when joint taxable income reaches $82,150. Single filers do not hit the 31 percent bracket until taxable income reaches $49,300. That gives single couples a $16,000 advantage where that income is only taxed at 28 percent.